The Moderating Role of the Management Accounting Information System in the Relationship between Innovation Strategy and Performance in Pakistani Banks

Khizra Massab and Danish Ahmed Siddiqui

EconStor Preprints from ZBW - Leibniz Information Centre for Economics

Abstract: The purpose of the study is to better understand the relationship between accounting systems and innovation in the banking industry by investigating how MAIS affects the impact of different innovation methods on financial results. The research explores looks at how the Management Accounting Information System (MAIS) affects the link between financial performance (FP) and innovation strategy (IS) in Pakistani banks. Six innovation strategies were included namely 1. Aggressiveness, 2. Analysis, 3. Defensiveness, 4. Futurity, 5. Pro-activeness, and 6. Riskiness and their effect on banks' financial performance are accessed. Performance dimensions included 1. Financial Performance, 2. Customer Performance, 3. Internal Business Processes Performance, and 4. Learning and Growth Performance. We also contend that a better Management Accounting Information System (MAIS) would make the impact of innovation strategies on performance more pronounced. The quality of MAIS is measured by 1. Integration management, 2. Sales Management System, 3. Management Reporting System, 4. Budget Management System, and 5. Timeliness. Purposive sampling was used to choose key personnel from the top ten banks in Pakistan, with an emphasis on those in charge of strategic and financial decision-making. A structured questionnaire was used to gather data, and Smart PLS software was used to evaluate the survey using descriptive statistics and structural equation modeling (SEM). Cross-loadings, reliability, and discriminant validity tests were used to thoroughly verify the IS, MAIS, and FP constructs. The results suggested that the association between innovation strategies and financial performance is considerably moderated by MAIS. In particular, MAIS has a negative moderating effect in riskiness and futurity situations, but it increases the influence of aggressive and proactive innovation tactics on financial results. These findings imply that while MAIS may be helpful in some situations, excessive dependence on analytical or forward-looking approaches may impede flexible decision-making in quickly changing financial environments. Hence, the findings suggested that to promote sustainable development and a competitive edge in the market, banks must strike a balance between strategic innovation and strong accounting processes, as shown by the complex function of MAIS.

Keywords: Management Accounting Information System (MAIS); Innovation Strategy (IS); Financial Performance (FP); Banking Sector; Pakistani Banks; Strategic Moderation (search for similar items in EconPapers)
Date: 2026
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